7781.T WACC - Weighted Average Cost of Capital
The WACC of Hirayama Holdings Co Ltd (7781.T) is 7.3%.
| Range | Selected | |
| Cost of equity | 7.1% - 9.3% | 8.2% |
| Tax rate | 40.5% - 42.2% | 41.35% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.3% - 8.2% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.93 | 0.98 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.1% | 9.3% |
| Tax rate | 40.5% | 42.2% |
| Debt/Equity ratio | 0.2 | 0.2 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.3% | 8.2% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 7781.T | Hirayama Holdings Co Ltd | 0.2 | 0.88 | 0.78 |
| 2479.T | JTec Corp | 0.04 | 0.91 | 0.89 |
| 4318.T | Quick Co Ltd | 0 | 0.93 | 0.93 |
| 4336.T | Crie Anabuki Inc | 0.04 | 1.13 | 1.11 |
| 4641.T | Altech Corp | 0 | 0.81 | 0.81 |
| 6070.T | Careerlink Co Ltd | 0.03 | 0.65 | 0.64 |
| 6198.T | Career Co Ltd | 0.3 | 0.39 | 0.33 |
| 6575.T | Human Associates Holdings Inc | 0.19 | 1.12 | 1 |
| 7041.T | CRG Holdings Co Ltd | 4.64 | 0.15 | 0.04 |
| 7088.T | Forum Engineering Inc | 0 | 0.84 | 0.84 |
| Low | High | |
| Unlevered beta | 0.8 | 0.86 |
| Relevered beta | 0.9 | 0.97 |
| Adjusted relevered beta | 0.93 | 0.98 |
7781.T's CAPM model and how its cost of Equity is calculated
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for 7781.T:
cost_of_equity (8.20%) = risk_free_rate (1.65%) + equity_risk_premium (6.60%) * adjusted_beta (0.93) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.